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New Payroll Tax Laws for 2023

December 29, 2022

With tax year 2022 coming to an end, there are several new payroll tax laws going into effect on January 1, 2023.

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At A Glance

With tax year 2022 coming to an end, there are several new laws becoming effective on January 1, 2023. See below for a brief synopsis of the upcoming laws along with federal, state, and local tax updates.

Federal Tax Updates for 2023

The Social Security Administration (SSA) announced the Social Security wage base limit would increase to $160,200 for tax year 2023 an increase of $13,200 from $147,000, in 2022.

The Social Security and Medicare tax for tax year 2023 will remain unchanged. The Social security tax rate remains at 6.2% for 2023 up to the Social Security wage base limit. The maximum social security tax employees and employers will each pay in 2023 is $9,932.40 an increase of $818.40 from tax year 2022.

The Medicare tax rate for tax year 2023 remains at 1.45% and applies to all covered earnings for employees and employers. There is no wage base limit for Medicare. In addition, if an individual’s earned income exceeds $200,000 ($250,000 for married couples filing jointly), the excess income amount is subject to additional Medicare tax rate of 0.9%.

State Unemployment Insurance Wage Base Limits

Jurisdiction

2023 Taxable Wage base

2022 Taxable Wage Base

Jurisdiction

2023 Taxable Wage base

2022 Taxable Wage Base

Alabama

$8,000

$8,000

Montana

$40,500

$38,100

Alaska

$47,100

$45,200

Nebraska

$9,000

$9,000

Arizona

$8,000

$7,000

Nevada

$40,100

$36,600

Arkansas

$10,000

$7,000

New Hampshire

$14,000

$14,000

California

$7,000

$7,000

New Jersey

$41,100

$39,800

California SDI

$153,564

$145,600

New Jersey TDI EE

$156,800

$151,900

Colorado

$20,400

$17,000

New Mexico

$30,100

$28,700

Connecticut

$15,000

$15,000

New York

$12,300

$12,000

Delaware

$14,500

$14,500

North Carolina

$29,600

$28,000

District of Columbia

$9,000

$9,000

North Dakota

$40,800

$38,400

Federal

$160,200

$147,000

Ohio

$9,000

$9,000

Florida

$7,000

$7,000

Oklahoma

$25,700

$24,000

Georgia

$9,500

$9,500

Oregon

$50,900

$47,700

Hawaii

$56,700

$51,600

Pennsylvania

$10,000

$10,000

Idaho

$49,900

$46,500

Puerto Rico

$7,000

$7,000

Illinois

$12,960

$12,960

Rhode Island

$28,200

$24,600

Indiana

$9,500

$9,500

South Carolina

$14,000

$14,000

Iowa

$36,100

$34,800

South Dakota

$15,000

$15,000

Kansas

$14,000

$14,000

Tennessee

$7,000 

$7,000

Kentucky

$11,100

$11,100

Texas

 $9,000

$9,000

Louisiana

$7,700

$7,700

Utah

$44,800

$41,600

Maine

$12,000

$12,000

Vermont

$13,500

$15,500

Maryland

$8,500

$8,500

Virgin Island

$30,800

$30,800

Massachusetts

$15,000

$15,000

Virginia

$8,000

$8,000

Michigan

$9,500

$9,500

Washington

$67,600

$62,500

Minnesota

$40,000

$38,000

West Virginia

$9,000

$9,000

Mississippi

$14,000

$14,000

Wisconsin

$14,000

$14,000

Missouri

$10,500

$11,000

Wyoming

$29,100

$27,700

State Minimum Wage Rates effective January 1st, 2023

Jurisdiction

2022 Minimum Wage

2023 Minimum Wage

Jurisdiction

2022 Minimum Wage

2023 Minimum Wage

Alabama

$7.25

$7.25

Missouri

$11.15

$12.00

Alaska

$10.34

$10.85

Montana

$9.20

$9.95

Arizona

$12.80

$13.85

Nebraska

$9.00

$10.50

Arkansas

$11.00

$11.00

Nevada

$10.50, $9.50 w/ health benefits

$10.25, $9.50 w/ health benefits

California

$15 (large employer) & $14 (small employer)

$15.50

New Hampshire

$7.25

$7.25

Colorado

$12.56

$13.65

New Jersey

$13(large employer) & $11.90(small employer)

$14.13(large employer) & $12.93(small employer)

Connecticut

$14.00

$14.00

New Mexico

$11.50

$12.00

Delaware

$10.50

$11.75

New York

$15.00 New York City, Nassau, Suffolk, & Westchester counties; the rest of the state: $13.20

$15 per hour in New York City; Long Island & Westchester. Remainder of New York, $14.20 per hour

District of Columbia

$15.20

$16.10

North Carolina

$7.25

$7.25

Federal

$7.25

$7.25

North Dakota

$7.25

$7.25

Florida

$11.00

$11.00

Ohio

$9.30

$10.10

Georgia

$5.15

$7.25

Oklahoma

$7.25

$7.25

Hawaii

$10.10

$12.00

Oregon

Metro: $14.75 

Metro: $14.75 

Idaho

$7.25

$7.25

Pennsylvania

$7.25

$7.25

Illinois

$12.00

$13.00

Rhode Island

$12.25

$13.00

Indiana

$7.25

$7.25

South Carolina

$7.25

$7.25

Iowa

$7.25

$7.25

South Dakota

$9.95

$10.80

Kansas

$7.25

$7.25

Tennessee

$7.25

$7.25

Kentucky

$7.25

$7.25

Texas

$7.25

$7.25

Louisiana

$7.25

 

Utah

$7.25

$7.25

Maine

$12.75

$13.80

Vermont

$12.55

$13.18

Maryland

$12.50 (large employer) & $12.20 (small employer)

$13.25 for 15 or more EES. $12.80 for 14 or fewer EEs

Virginia

$11.00

$12.00

Massachusetts

$14.25

$15.00

Washington

$14.49

$15.74

Michigan

$9.87

$10.10

West Virginia

$8.75

$8.75

Minnesota

$10.33 (large employer) & $8.42 (small employer)

$10.59(large employer) & $8.63(small employer)

Wisconsin

$7.25

$7.25

Mississippi

$7.25

$7.25

Wyoming

$5.15

$5.15

Local Minimum Wage Rates effective January 1st, 2023

State

Locality

Rate

State

Locality

Rate

Arizona

Flagstaff

$16.80 

California

San Carlos

$16.32 

 

Tucson

$13.85 

 

San Diego

$16.25 

California

Alameda

$15.75 

 

San Diego

$16.30 

 

Bel Mont

$17.35 

 

San Jose

$17.00 

 

Burlingame

$16.47 

 

San Mateo

$17.35 

 

Cupertino

$17.20 

 

Santa Clara

$16.34(large employer)/$15.00(small employer)

 

Daly City

$16.07 

 

Santa Monica

$15.96 

 

East Palo Alto

$16.50 

 

South San Francisco

$16.70 

 

El Cerrito

$17.35 

 

Sunnyvale

$17.95 

 

Half Moon bay

$16.45 

Colorado

Denver

$17.29 

 

Hayward

$16.34(large employer)/$15.00(small employer)

Minnesota

Minneapolis

$15.19(large employer)/$14.50(small employer)

 

Los Altos

$17.20 

New Mexico

Albuquerque

$12.00 

 

Malibu

$15.96 

 

Las Cruces

$12.00 

 

Novato

$16.32 

New York

Areas outside Westchester County

$14.20 

 

Palo Alto

$17.25 

Washington

SeaTac

$19.06 for hospitality and transportation employees

 

Petaluma

$17.06 

 

Seattle

$18.69(large employers/$16.50(small employers)

 

Redwood City

$17.00 

 

Tukwila

$19.06  

Paid Family and Medical Leave Rates Effective 1/1/2023

Jurisdiction 

2023 Rate​​ 

Paid By​​ 

California​​ 

0.9%​​ 

Employees​​ 

Colorado

0.9%

Employer & Employee



ER

EE

9 or less EE

0%

0.45%

10 or more EE

0.45%

0.45%

 

Connecticut​​ 

0.5%​​ 

Employees​​ 

Massachusetts​​ 

0.63% 

 

Medical:0.52% 

 

Family: 0.11% 
 

The contribution total rate is 0.63%

Employer & Employees

25 or more employees



Medical

Family

ER

 0.312%

(0.52%)

0%

EE

 0.208%

0.11%

25 or less employees



Medical

Family

ER

0%

0%

EE

0.208%

0.11%

 

New Jersey​​ 

0.00006 

Employees​​ 

New York​​ 

0.455%​​ 

Employees​​ 

Rhode Island​​ 

1.1%​​ 

Employees​​ 

District Of Columbia​​ 

0.26%​​ 

Employees​​ 

Washington​​ 

0.8%​​ 

Employers & Employees​​ 

Oregon​​ 

1% up to the wage cap 

E1% up to the wage cap



ER

EE

24 or less EE

0%

60%

25 or more EE

40%

60%

*New Hampshire​​ 

TBD​​ 

Voluntary Program​​ 

Next Steps

For more information on tax laws and local legislation, please visit our resource library. We will continue to communicate updates as they become available.

Thank you for choosing Paylocity as your Payroll Tax and HCM partner. This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.

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